The S&P 500 Rose 5.9 percent In The 3rd Quarter Of 2012, But Is Sector Rotation Occurring?
Stocks finished flat today with another distribution day as investors steered clear from long positions. Asian stocks drifted lower as renewed fears about a slowdown in the region increased. Apple continued to slide as market participants kept away from tech stocks. We are still bullish short term but with a defensive posture as the market didn’t turn sharply positive towards the end of the week.
The market has been resilient for the past few weeks without pausing or consolidating and this week may have been a true test to see if long term holders would hang in as market dropped slightly this week to end the third quarter. The S&P 500 was down 1.3 percent for the week ended Friday September 28. Most money managers are still behind the curve and underperforming the major averages so they will either need to double down or hope the market continues its slide. The Fed will put a floor in the market and the Bernanke /Draghi/global put is still in effect so we see no reason to be bearish long term yet.
The lack of interest in Apple is predictable after a product release but with other tech stocks falling slightly in sympathy we are looking at sector rotation measurements to determine if traders are interested in cyclicals again and safe haven-high dividend paying stocks. If the fourth quarter 2012 begins without much upside fanfare this may be proof sector rotation is occurring again this year.
Quick Stats for the 3rd Quarter and month of September 2012
- S&P 500 rose 5.9 percent in the 3rd Quarter of 2012
- Dow rose 2.6 percent in September 2012
- S&P 500 increased 2.4 percent in September 2012
- NASDAQ rose 1.6 percent in September 2012